Behind the continued surge in power stocks, it's not just about "electricity calculation collaboration"

Ask AI · How can a HALO strategy make power assets a new favorite for market risk hedging?

Everyone should have seen the recent performance of the power sector. Not to overstate it, it feels a bit like a shift from “Niu Lady” to “Little Sweetheart.”

A year ago, when it came to power stocks, many people’s first reaction might have been “steady,” “defensive,” and “decent dividends,” but if you asked how much imagination space there was, it always seemed to fall a little short. But this recent wave, the logic seems to be different.

Let’s start by discussing a possible new term many people have been hearing a lot lately—“compute-and-power coordination.”

In March 2026, the government work report for the first time included “compute-and-power coordination” in the national strategy, as a key area to promote in new infrastructure projects. According to the definition, “compute-and-power coordination” refers to deeply integrating the compute-power infrastructure with the power system through digital and intelligent technologies, enabling two-way interaction and optimized allocation between compute workloads and power supply.

It sounds a bit convoluted, but put simply it contains two layers of meaning: one is “power supports compute,” meaning green electricity is supplied directly to data centers, so that computing centers have stable, low-cost electricity for their operations; and two is “compute optimizes power,” using AI algorithms to predict fluctuations in renewable power generation, turning data centers from a mere “major electricity consumer” into a “flexible power system adjustment resource.”

Think about it, with AI being how hot it is now and with token consumption so large, the underlying reality is massive compute power and electricity demand. According to predictions from China’s Academy of Information and Communications Technology, by 2030, electricity consumption by China’s data centers will account for 6% of total electricity usage across society, while it is currently under 2%. This means that electricity is no longer that kind of slowly growing “public utility.” It is becoming the “new oil” of the digital age.

Another investment logic is the HALO attributes of power assets. For a long time, the market favored light-asset, high-growth technology stocks, and wasn’t very interested in these power assets that are “heavy and slow.” But since this year, in the U.S. stock market, multiple industries such as legal software, insurance, and logistics have suffered sharp declines due to AI replacement expectations. In contrast, a group of companies with heavy assets and slow technological iteration have gained strength against the trend, becoming a safe haven for capital. In this market style rotation, the HALO strategy (Heavy Assets, Low Obsolescence—heavy assets + low obsolescence rate) has suddenly emerged and quickly become a core allocation logic for Wall Street institutions.

The core logic is that while AI technology makes everything accelerate, it also makes everything increasingly uncertain. The market begins to look for things that are not easily replaced by AI technology. And power grids, ultra-high-voltage transmission networks, and large-scale energy storage facilities—those with high upfront investment, high barriers, long lifespans, and characteristics that are difficult to overturn technologically—are the typical HALO assets. The market believes that no matter how AI iterates and how chips upgrade, the physical power transmission backbone—the actual power network—remains the physical foundation for energy transfer.

Finally, there is the energy security angle. Whether it’s the Russia-Ukraine conflict or the current U.S.-Iran situation, they have driven a real increase in global energy prices and heightened energy anxiety. As a result, the strategic position of power as a “resilient energy” has been significantly elevated. An analysis by China International Securities points out that the U.S.-Iran conflict led to disruptions in the transit of the Strait of Hormuz. In 2025, crude oil and LNG (liquefied natural gas) transported through the Strait of Hormuz accounted for 31% and 19.3% respectively of global trade volume. If the supply is interrupted, it would seriously affect LNG supply from countries like Qatar.

Based on the above logic, the author has also summarized some key sources of returns in the power sector, including green electricity direct-supply operators, integrated generation-grid-load-storage solutions, IDC supporting power grid equipment, and concepts related to virtual power plants, for readers’ reference.

Overall, in the past few years, people didn’t pay much attention to power stocks; they were mostly used as a defensive allocation for the core position. But now the logic has changed—with three layers of logic stacked together: compute power surging, HALO re-rating, and energy security, the power sector may be undergoing a qualitative transformation from “utilities” to “digital energy infrastructure.” Of course, the market always rises and falls, and even the best logic won’t be realized overnight. But at least for now, it doesn’t look like a short-term theme-driven speculation; it looks more like a long-term industrial trend.

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